NEWS: Rivals invade PR agency territory

Growth has returned to PR agencies, but others are encroaching on their territory, according to two new surveys.

Growth has returned to PR agencies, but others are encroaching on their

territory, according to two new surveys.



The UK’s PR agency sector returned to growth in 1995, according to the

PRCA inter-firm comparison. But a similar survey from the Management

Consultancies Association reveals a dramatic increase in the amount of

marketing and corporate communication work handled by its members.



The PRCA survey tracks the performance of a cross-section of its 175

members, which represent around 80 per cent of the fee income for the UK

consultancy sector.



The average profit margin before tax among the 63 firms taking part in

this year’s PRCA survey was up by 11.7 per cent to ten per cent. Annual

retainers increased by 12.9 per cent to pounds 70.6 million, or 79.7 per

cent of total fee income.



Meanwhile the MCA has also released its figures for members. Their total

annual UK fee income rose to pounds 968 million in 1995. MCA members are

reckoned to account for around 50 per cent of all management consultancy

fees in the UK.



Significantly, some of the most dramatic growth for management

consultancies was in ‘marketing and corporate communication’ - up 50 per

cent to pounds 28 million.



PRCA spokesman Crispin Manners, of The Argyll Consultancies, described

the PRCA findings as ‘upbeat’.



‘It demonstrates that clients are using PR more to plan long-term

communications strategies and that PR companies are investing in the

future through increased training,’ he said. ‘It also shows our members

are running their businesses more efficiently as the industry matures’.



And he played down the threat from management consultancies.

‘Management consultants are not people we see on a regular basis in

competitive situations,’ he said. ‘But any organisation capable of

motivating its people adequately to deliver a consistent PR service is

one we need to take seriously.’



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